diff --git a/src/manager.ts b/src/manager.ts
index b1ce63d..9fa76e7 100644
--- a/src/manager.ts
+++ b/src/manager.ts
@@ -240,12 +240,14 @@ export class Manager implements vscode.TreeDataProvider<string | FileSystemConfi
     // Create connection (early so we have .actualConfig.root)
     const con = await this.createConnection(name, config);
     // Calculate working directory if applicable
-    let workingDirectory: string | undefined = uri ? uri.path : con.actualConfig.root || '/';
+    let workingDirectory: string | undefined = uri && uri.path;
     if (workingDirectory) {
       // Normally there should be a fs, as (currently) workingDirectory is only provided
       // when the user uses "Open remote SSH terminal" on a directory in the explorer view
       const fs = this.fileSystems.find(fs => fs.config.name === name);
-      workingDirectory = fs ? fs.relative(workingDirectory) : undefined;
+      workingDirectory = fs ? fs.relative(workingDirectory) : (con.actualConfig.root || '/');
+      // If we don't have an FS (e.g. SSH View > Open Terminal without an active FS), we
+      // just use the declared `root` field, which _hopefully_ works out nicely with `cd`
     }
     // Create pseudo terminal
     con.pendingUserCount++;
@@ -372,11 +374,11 @@ export class Manager implements vscode.TreeDataProvider<string | FileSystemConfi
     const name = typeof target === 'string' ? target : target.name;
     uri = uri || vscode.Uri.parse(`ssh://${name}/`, true);
     try {
-    if (typeof target === 'string') {
-      await this.createTerminal(target, undefined, uri);
-    } else {
-      await this.createTerminal(target.label || target.name, target, uri);
-    }
+      if (typeof target === 'string') {
+        await this.createTerminal(target, undefined, uri);
+      } else {
+        await this.createTerminal(target.label || target.name, target, uri);
+      }
     } catch (e) {
       const choice = await vscode.window.showErrorMessage<vscode.MessageItem>(
         `Couldn't start a terminal for ${name}: ${e.message || e}`,
diff --git a/src/pseudoTerminal.ts b/src/pseudoTerminal.ts
index f3bf42e..f589e90 100644
--- a/src/pseudoTerminal.ts
+++ b/src/pseudoTerminal.ts
@@ -29,7 +29,16 @@ export async function createTerminal(client: Client, config: FileSystemConfig, w
     // Hopefully the exit event fires first
     channel.on('close', () => onDidClose.fire(0));
     // There isn't a proper way of setting the working directory, but this should work in most cases
-    if (workingDirectory) channel.write(`cd "${workingDirectory}"\n`);
+    if (workingDirectory) {
+        if (workingDirectory.startsWith('~')) {
+            // So `cd "~/a/b/..." apparently doesn't work, but `~/"a/b/..."` does
+            // `"~"` would also fail but `~/""` works fine it seems
+            workingDirectory = `~/"${workingDirectory.substr(2)}"`;
+        } else {
+            workingDirectory = `"${workingDirectory}"`;
+        }
+        channel.write(`cd ${workingDirectory}\n`);
+    }
     const pseudo: SSHPseudoTerminal = {
         config, client, channel,
         onDidWrite: onDidWrite.event,